2003 General Studies, all questions

UPSC Prelims 2003 · General Studies

Question 50: Economy and Social Development

Consider the following statements: In India, stamp duties on financial transactions are

  1. 1.Levied and collected by the State Government
  2. 2.Appropriated by the Union Government.

Which of these statements is/are correct?

aOnly 1
bOnly 2
cBoth 1 and 2
dNeither 1 nor 2

AnswerThe answer is (d).

Under Article 268, stamp duties on bills of exchange, cheques, promissory notes and similar financial instruments are levied by the Union (Union List, Entry 91) but collected and kept by the States within which they are leviable; in Union Territories they are collected by the Union. So both statements fail: the duties are levied by the Union, not the State, and the proceeds go to the States, not the Union.

  • 1. The Union levies these duties; the States only collect them (Article 268).
  • 2. The proceeds are assigned to the States, not appropriated by the Union.
Why each option is right or wrong
  • (a) Statement 1 is false: the levy is by the Union, though the States collect.
  • (b) Statement 2 is false: the proceeds are assigned to the States.
  • (c) Both are false, so 'both correct' fails.
  • (d) Correct: neither statement is right.

Explanation: written by UPSC Grade, not by UPSC.

Practise this paper timedPrevious questionNext question

Source: UPSC, Civil Services (Preliminary) Examination 2003, General Studies. UPSC's own paper isn't online; the words are from a published compilation. The paper on upsc.gov.in.